Summary of proposed guarantee
Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.
- Project name
- OOO Ken-Pak Zavod Upakovki
- Project ID
- Fiscal year
- Guarantee holder
Tapon France S.A.S.
- Investor country
- Host country
- Environmental category
- Date SPG disclosed
- November 27, 2013
- Project Board date
- January 01, 2014
- Gross exposure
- $64.6 million
- Project type
- Environmental and Social Review Summary in PDF, November 27, 2013
This summary covers an equity investment and two shareholder loans by Tapon France S.A.S. of France in OOO Ken-Pak Zavod Upakovki (KPZU) in the Russian Federation. KPZU is a Russian wholly-owned subsidiary of Tapon France S.A.S. The investor has applied for a MIGA guarantee of $64.6 million for a period of up to 11 years (equity) and seven years (shareholder loans) against the risks of transfer restriction, expropriation, and war and civil disturbance.
MIGA’s new coverage represents continued support to the project, which began in 2009 and consisted of guarantees issued for the construction of an aluminum beverage can facility in Volokolamsk.
The project will expand to include a second factory in Novocherkassk, in the Rostov region. The new investment will support the installation, assembly, and startup of the beverage can production line and conversion of existing buildings to provide sufficient space for production and warehousing. The second plant is expected to double production capacity from the current 950 million to 1,900 million cans per year.
The project’s expansion will build on the success of the company’s first plant in Russia. The Volokolamsk plant has introduced competition in an otherwise monopolistic market, resulting in lowered can prices, product innovations, and enhanced service.
The company’s adherence to sound environmental and social practices as well as its transfer of state-of-the-art technology and management systems have added significant value—and had a demonstration effect inside the country.
The expansion will create additional local jobs, demand for servicing of advanced technologies employed in KPZU’s production process, as well as local sourcing of other services and goods.
The project is aligned with the World Bank Group’s Country Partnership Strategy for the Russian Federation, which calls for promoting economic diversification for sustainable growth, facilitating investment in non-traditional sectors and, supporting technological modernization in the manufacturing sector.